Commissioner of Revenue

Frequently Asked Questions About...

 

Business Tangible Personal Property Tax

Download the "Business Tangible Personal Property Tax - Questions & Answers" brochure. (126.3K PDF format).


Q.What is Business Tangible Personal Property?

A. All furniture, fixtures, machinery, tools, and programmable computer equipment used in Arlington County businesses is considered tangible personal property. Programmable computer equipment includes all computer and peripheral equipment hardware and all operational software.

Q.Who must file a business tangible personal property tax return?

A. All businesses in Arlington County must file a return on or before May 1 of each year. Businesses need to report tangible personal property owned, leased, or in their possession in Arlington County as of January 1 of each year. If you have a business in Arlington and you do not own, lease, or possess personal property, you are required to sign and return the form with an attached statement confirming you have no personal property and explaining how you conduct your business.

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Q. What must I attach to my return?

A. Attach your current federal depreciation schedule and an itemized list of all property owned by your business. Indicate only those items that are located in Arlington County. In order to be complete, your tax return must contain these attachments. As part of the Commissioner's commitment to technological advancement and quality customer service, businesses are encouraged to submit their itemized lists on disk or CD. The list should be submitted in a spreadsheet format and set up to match the chart on the return. Separately identify programmable computer equipment and owned property.

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Q. What is the due date for filing?

A. File on or before May 1 to avoid late filing penalties. Your tax bill will be mailed in August, and, beginning in 2010, payment will be due on or before September 5.

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Q.May I obtain an extension to file the tax return after May 1?

A. Unfortunately, extensions cannot be granted for filing this return. If you do not have all the information required, file the return with the information you have, and amend later.

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Q.What is the penalty for failure to file this tax return by May 1?

A. The late filing penalty is 10% of the tax determined to be due. Additional penalties will be incurred if payment is late (after September 5).

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Q.If I ceased business after January 1, do I still need to file this return?

A. Yes. If you were in business on January 1, you must file the return on or before the filing due date of May 1. Be sure to indicate the exact date of cessation of the business on the return.

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Q.If I ceased business after January 1, will my tax be prorated?

A. No. Business tangible tax is not prorated.

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Q. I own personal property that I lease to others for their business use, but my agreement with them requires them to pay any local taxes which might be assessed. Do I have to report leased property on this form?

A. Yes. As the owner of the property, you are required to file the return and pay the tax assessment, even if you have a private agreement with your lessee.

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Q.I lease tangible personal property from others. Do I have to report these items if the lessor is also reporting them to you?

A. Yes. By law, you are required to report all property in your possession, including leased property. This information allows us to ascertain that the lessor has reported the property and is properly assessed.

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Q. Some of my tangible personal property is fully depreciated. Do I have to report these items?

A. Yes. All business property must be reported, even items that are fully depreciated or expensed for IRS purposes. If the IRS does not require you to file a depreciation schedule, attach a list of all your business personal property to the return. Remember to include the date of purchase and the original cost of the property.

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Q. What is meant by "original capitalized cost"?

A. This is the actual cost of the business tangible personal property before any allowance for depreciation. It includes all costs associated with putting an asset into use (such as sales tax, delivery and freight charges, installation, labor, etc.). If the property was expensed under Section 179 of the IRS Code, its original capitalized cost is the amount that was expensed for federal tax purposes.

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Q. How is the assessed value of my property computed? How is the tax calculated?

A. The assessed value is determined by a set percentage (based on the year of purchase) of the original capitalized cost of each item. These percentages are on the front of the return titled Part 1: Owned Property. For example, personal property placed in service in the previous calendar year is assessed at 80% of its original capitalized cost. For the calendar year before that, at 70% of its original capitalized cost. The percentage decreased annually by 10% until it reaches 20%, then remains at that level until it is no longer in service. The tax is then computed by multiplying the total assessed value by the tax rate. The current tax rate is $5.00 per $100 of assessed value.

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Q. How is the assessed value of my programmable computer equipment computed? How is the tax calculated?

A. The assessed value is determined by a set percentage (based on the year of purchase) of the original capitalized cost of each item. These percentages are on the front of the return titled Part 2: Programmable Computer Equipment. For example, computer equipment placed in service in the previous calendar year is assessed at 65% of its original capitalized cost. For the calendar year before that, at 45%; for the year before, at 30%; then at 10% for all previous years until it is no longer in service. The tax is then computed by multiplying the total assessed value by the tax rate. The current tax rate is $5.00 per $100 of assessed value.

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Q. Is computer software taxable?

A. Operational software (Windows, Linux, JCL, UNIX, DOS-VSE, etc.) is taxable and must be included in Part 2 of the return. Application software, such as Microsoft Office, is not subject to tax.

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Q. Should vehicles be reported on this return?

A. No. Over-the-road vehicles, such as cars, trucks, and trailers should be reported on the Arlington County Personal Property Tax Return and Vehicle Registration form. (15.0K PDF format). Please call 703-228-3135 for more information about the vehicular personal property tax.

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Q. Whom should I contact if I need assistance?

A. You may visit the Commissioner's Business Tax Division (Room 208) at any time between 8:00 a.m. and 5:00 p.m., Monday through Friday. You can also reach us by phone at 703-228-3060. Visit our web home page for additional information and forms.

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ON THIS PAGE

Business Tangible Personal Property Tax Defined
Who Must File?
What Must Accompany Return?
When is the Due Date to File?
Extension to File
Late Filing Penalty
If Business Has Ceased
Is the Tax Prorated?
Leasing Property to Others
Leasing Property from Others
Fully Depreciated Property
Original Capitalized Cost Defined
How Property is Assessed and Tax Calculated?
How Computer Property is Assessed and Tax Calculated?
Computer Software
Should Vehicles Be Included?
Office Contact Information

Last Modified: February 28, 2014
2100 Clarendon Blvd. Arlington, VA 22201 Tel: 703-228-3000 TTY: 703-228-4611